The Ministry of Education Budget : Trends and Issues

Transcription

1 TAUB CENTER for Social Policy Studies in Israel The Ministry of Education Budget : Trends and Issues Nachum Blass and Yulia Cogan Policy Paper No Jerusalem, September 2014

2 TAUB CENTER for Social Policy Studies in Israel The Taub Center was established in 1982 under the leadership and vision of Herbert M. Singer, Henry Taub, and the American Jewish Joint Distribution Committee. The Center is funded by a permanent endowment created by the Henry and Marilyn Taub Foundation, the Herbert M. and Nell Singer Foundation, Jane and John Colman, the Kolker-Saxon-Hallock Family Foundation, the Milton A. and Roslyn Z. Wolf Family Foundation, and the American Jewish Joint Distribution Committee. This volume, like all Center publications, represents the views of its authors only, and they alone are responsible for its contents. Nothing stated in this book creates an obligation on the part of the Center, its Board of Directors, its employees, other affiliated persons, or those who support its activities. Translation: Ruvik Danieli Editing and Lay-out: Laura Brass Center address: 15 Ha ari Street, Jerusalem Telephone: Fax: info@taubcenter.org.il Website: Internet edition

3 The Ministry of Education Budget : Trends and Issues Nachum Blass and Yulia Cogan Abstract The state, which also includes the Ministry of Education, is the immediate and most concrete reflection of the state's priorities in resource allocation, and of its assessments regarding future developments and how to prepare for them. The and the debates are supposedly open and transparent to the public, and everyone is entitled to express an opinion on all of the areas included in it. In effect, however, this is not at all the case. The is largely unintelligible to anyone unfamiliar with its intricacies, and because of this, it cannot be easily related to in any real and critical way by the general public. Anyone trying to learn about the guiding principles and rules that were used in the drafting of the from relevant sources (like the internet sites) will also find it difficult, to put it mildly as will be shown in this paper. This policy paper has two aims. First, it describes the Ministry of Education between 2000 and 2012, and details policy that is implicit in that. The period studied includes both Nachum Blass, senior education researcher, Taub Center for Social Policy Research in Israel; Yulia Cogan, researcher, Taub Center for Social Policy Research in Israel. The authors would like to thank Sagit Azary-Viesel, researcher, Taub Center, who began the work on this topic, collected the Ministry of Education data for the years , and established the database..

4 years of economic downturn and years of growth, so it affords an overall view that goes beyond cyclical fluctuations. The second aim, which is no less important, is to highlight the lack of transparency and how this impacts the possibility of using the as a real planning tool.

5 Table of Contents Introduction 5 1. Overview of the Ministry of Education Budget Changes in the Ministry of Education Budget at the Designated Area Level Changes in the Budgets of Selected Areas Summary and Conclusions Proposals for Improvement and Change 66 Appendices 70 References 78

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7 The Ministry of Education Budget: Introduction Different Budget Types 1 In order to discuss the Ministry of Education, it is important to understand that there is not a single, but at least three different types of : the original, the amended, and the final or implemented. Each of these types is further divided into two gross and net. 2 Original Budget. This is the annual proposal that is submitted to the Knesset for approval, usually around September, and it includes information about the available to the Ministry of Education. This is an overall, without details of specific clauses. The original is comprised of three columns: The first is the net original, which includes only government allocations to the Ministry of Education. The second column is expenditure from income, which details expected income to the ministry from parties that are not in the direct, e.g., parental payments for children 3-4 years old in pre compulsory preschool who are not included in the Free Compulsory Education Law 3, or income from school book sales. The first two columns comprise the gross original. The third column in the original is "authorization to commit" allocations to ensure continued financing for multi-year programs and projects, whose implementation cannot begin without the commitment for a multi-year. The amounts that appear in the authorization to commit are not included in either the net or gross. Their annual relative portion appears in the annual for each year of intended implementation according to the progress of the project and its fiscal planning. It is this column which determines the ability to conduct multi-year planning A broad and in-depth assessment of the essential issues regarding the as a whole can be found in Ben-Bassat and Dahan (2006). A figure detailing the structure of the appears in Section 1 in the Appendices. This changed in 2012 when it was decided to rescind all payments by parents for their preschool children.

8 6 Taub Center for Social Policy Studies in Israel Amended Budget. This is the that is actually 4 available for use by the ministry in a given year. This includes the original, with the following additions and deductions: A. Changes and additions adopted during discussions of the Knesset Finance Committee between the date of the 's submission and the date of its approval by the Knesset. B. Surpluses from the previous year's. These surpluses are divided into designated surpluses (contractual commitments of the ministry that were not executed in the course of the ongoing ary year) and undesignated surpluses (funds which for various reasons were not utilized during the year). The designated surpluses are almost automatically attached to the ministry's in two phases in the course of the following fiscal year. The undesignated surpluses are transferred to the Ministry of Education's pending Ministry of Finance and Finance Committee approval. C. Funds that were approved during an earlier fiscal year in the framework of authorization to commit and were planned to be implemented in the current fiscal year. D. Transfers to and from the general reserve fund approved by the Ministry of Finance and Finance Committee. Besides items that are specifically labeled "reserve", there are items that appear in the original totaling more than NIS 300 million (and more than a billion shekels in 2012), which show up as a zero sum in the amended and in the implemented. These items which appear in the almost every year represent a hidden reserve. In the years surveyed, the various reserve items ranged from approximately NIS 1.5 to 1.8 million. One of the most striking differences between the amended and the original is that the various reserve items do not appear at all (Table 1). The table compares all the clauses in which the definition "reserve" appears, as they appear in the original and in the amended between the years 2005 and The amended is nominally the that is available for use. Since the accounting is based on actual money flows, changes and additions that are made toward the end of the fiscal year cannot really be implemented.

9 The Ministry of Education Budget: Table 1. Total of reserve clauses (including hidden reserves) in the original and amended in NIS thousands, 2011 prices, Year Original Amended Hidden reserves in original ,781,453 46, , ,530, , ,647, , ,407, , ,663, , ,729, , ,520, , ,816,644-1,087, ,012, , ,014, ,424 Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance In addition, the amended shows internal transfers between various designated areas, plans and clauses. Implemented Budget. The implemented is the actually utilized by the Ministry of Education up to December 31 of a given ary year. This has the greatest political, educational, social, economic, and practical significance, as it expresses both policy preferences in the Ministries of Education and Finance and the Knesset, and the ability of Ministry of Education officials to implement policy decisions. The Accountant General's Report makes it possible to ascertain which of the clauses were executed in accordance with the planning in the original (if the original actually reflects the plan a question to be examined further on); clauses that deviated considerably from the planning; clauses that were not originally

10 8 Taub Center for Social Policy Studies in Israel ed but later received funding; and, clauses whose s remained unused by the end of the year. The Accountant General's Report has two limitations, though. First, it is published only at the end of April following the reported ary year (five months later). Second, as noted previously, it is a report on cash execution, and does not reflect any Ministry commitments made during the course of the year and not yet implemented. Thus, it could be argued that the report does not reflect the actual implementation. In the authors' view, this claim is valid only with regard to the examination of a single year, and not when the s of a decade or more are examined. It is also important to clarify what cannot be learned from the, at least not from the way it is currently presented to the public. First, it is impossible to ascertain the division of the among the various population sectors, because except for a handful of items, there is no differentiation between items specifically intended for Jews, Arab Israelis, or Bedouin. Most ary items are demarcated according to topic, making it impossible to distinguish between sectors. For the same reason, it is impossible to distinguish funding allocations on the basis of gender, or with regard to their distribution in the periphery or the center area of the country. 5 Although a separate area is defined for the Haredi (ultra-orthodox Jewish) pupil population, it is still impossible to determine the full amount of allocations to this population because many of them are included in more general item allocations. In the past, attempts have been made to examine the amount of resources allocated to socioeconomically disadvantaged populations, but that is almost impossible, because with the exception of a few items e.g., the of the Department of Education and Welfare Services, or the for hours allocated to enrichment programs most of the items are general in their designation (Blass, 2007). All the differences between the original, the amended and implemented give rise to two phenomena that make it difficult to track the or to use it as a planning tool for policy implementation. One of them is that the overall amended is usually larger than the original. As shown in the first column from the right in Table 2, between 2000 and 2012 the amended was on average 5 percent higher than the original. Furthermore, the table shows that the 5 This is also one of the reasons why it is difficult to learn anything from the about the amount of investments in the West Bank.

11 The Ministry of Education Budget: implemented is only slightly larger than the original, and smaller on average than the amended by 4 percent. 6 Table 2. Relation between original, amended and implemented, Year Amended as % of original Implemented as % of original Implemented as % of amended % 100% 98% % 104% 98% % 98% 96% % 96% 95% % 100% 97% % 100% 96% % 98% 96% % 105% 94% % 104% 97% % 99% 96% % 102% 96% % 103% 95% % 108% 97% Average 105% 101% 96% Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance Budgetary tracking is also difficult due to large differences between the original, the amended and the final, implemented for a given area, plan or clause (Table 3). These gaps can be large even 6 It should be noted that in the last three years examined, the additions to the amended were especially large. This significantly increases the average gap between the original and the amended in the period under study.

12 10 Taub Center for Social Policy Studies in Israel if there is no difference in the overall totals between the original and the amended or the implemented, but they are, of course, even bigger when there is a difference between the amended and the original. 7 Each and every transfer from one clause to another, even when it has no overall effect on the net total, essentially has a double effect: reducing the of one clause, and increasing the of another clause. The change in various clauses in the Ministry's in 2012, for example, amounted to NIS 4.4 billion. This total is comprised of additions in various clauses to the extent of NIS 10.5 billion and reductions in others to the extent of NIS 6.1 billion. It goes without saying that the planning and public value of a is severely compromised when such a large part of it is subject to change over the course of the year. 7 The reasons for these gaps will be discussed more extensively further on in the paper.

13 The Ministry of Education Budget: Table 3. Relation between the types of s by main area, average implementation Area Amended as % of original Implemented as % of original Implemented as % of amended Staff units 28% 22% 76% Administration 116% 109% 94% Teacher administration Pedagogical administration 121% 116% 96% 131% 110% 84% Preschool education 109% 109% 100% Primary education 105% 103% 98% Secondary education 107% 103% 96% Localities education 106% 101% 95% Recognized independent education Transportation and equipment Transfers to religious education 125% 117% 93% 126% 115% 91% 137% 135% 99% Special education* 102% 100% 98% * As opposed to the actual, special education has been separated out here from primary education, because including it in the primary education area obscures its uniqueness. Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance Transfers and changes in the Ministry of Education require one of three types of authorization: approval of the Ministry of Finance Budget Department only, notification of the Knesset Finance Committee, or approval of the Knesset Finance Committee. The type of authorization required is mainly related to whether a clause, plan or area is concerned. Changes in clauses for the same program can be made without

14 12 Taub Center for Social Policy Studies in Israel the knowledge and approval of the Knesset 8 Finance Committee, but they must be approved by the Budget Department in the Ministry of Finance. Changes that entail a transfer from one plan to another, or from a plan to an area, require the approval or at least the notification of the Knesset Finance Committee. The need to obtain approval from the Ministry of Finance Budget Department of from the Knesset Finance Committee for any change in the clauses severely limits the Ministry of Education's flexibility and its ability to efficiently utilize its. As will be shown in the section dealing with the transparency of the, it also greatly expands the power of the Deputy Director-General and Director of the Economics and Budgeting Administration, of the official from the Ministry of Finance who is in charge of the Ministry of Education and of the chairman of the Finance Committee. 9 Ultimately, the is finalized only at the end of the ary year, and it gives expression to all of the changes introduced into it in the course of the year. The amended is in effect the real of that year, and as noted previously, it is larger than the original by 4.7 percent on average. 1. Overview of the Ministry of Education Budget The first question regarding the Ministry of Education is whether the education system's increased or decreased in real fiscal terms between the years 2000 and The answer to this question is obvious. Over the years , the original grew by 54 percent. The amended increased by 47 percent over the years , and the implemented by 45 percent in the same period (data for are unavailable). In order to examine that growth more closely, though, the increase in the numbers of pupils in the system must be taken into account. In that period ( ), the number of pupils increased by 24 percent; so while the Ministry of Education grew as a whole, the per pupil grew by much less. As is clearly shown in Figure 1, in terms of the increase in per pupil expenditure, two main periods can be discerned. From 2000 to 2009, the 8 9 The Israeli parliament. See also Ben-Bassat and Dahan's assessment of the matter in the chapter discussing the multi-year (Ben-Bassat and Dahan, 2006).

15 The Ministry of Education Budget: growth was limited, and sometimes the even shrank, and from 2009 to 2012 (and apparently even more so in ), the growth was much more rapid. The reasons for this change were the implementation of the new employment agreements with the teachers' unions and the accelerated implementation of the Compulsory Education Law for Ages 3-4 two steps that required larger s. 10 Figure 1 Ministry of Education per pupil, by type, in 2011 shekels Original Amended Implemented Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance Another important piece of information is the size of the education (all three types) relative to the state. As is shown in Figure 2, between 2000 and 2014 (or until 2012, in the case of the amended and implemented ), there was a real increase in the Ministry of Education's 's share of the overall state (except in the years 2003 and 2011). The rise in the original amounted to one and a half percentage points. There was an increase of the same order in the 10 Note that the data for the years are based on the original and an estimate of the number of pupils for 2014, whereas the data for are the actual numbers of pupils and the implemented. There may also be a small deviation when the actual data for and pupils are released for the years

16 14 Taub Center for Social Policy Studies in Israel Figure 2 Ministry of Education by type, as percent of overall government Implemented Original Amended Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance amended during the years , and the implemented educational 's share of the entire implemented rose over the same period from 9.5 to 10.4 percent. The fact that the implemented 's share of the entire implemented government is larger than the shares of the original and the amended is an indication that the Ministry of Education utilizes its more efficiently than the other ministries (this can largely be explained by the large share of the salary component in the Ministry of Education ). A related, but separate, question is the size of the education per pupil and its development relative to per capita GDP. It can generally be said that until 2006, the per pupil (of all types) declined relative to per capita GDP, and has since then been stable with even a slight rise (Figure 3).

17 The Ministry of Education Budget: Figure 3 Ministry of Education per pupil, by type, as percent of per capita GDP Per pupil implemented as % of GDP Per pupil amended as % of GDP Per pupil original as % of GDP Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance A comparison of the per pupil education expenditure in Israel with the same expenditure in other countries, particularly those of the OECD, provides another important perspective on Israeli society's regard for education. This comparison should be conducted from two viewpoints: the per pupil expenditure relative to per capita GDP, and the purchasing power per pupil expenditure in each country. The first comparison yields important information about how high the education system ranks on the society's priority list. The second provides information on the scope of resources at the pupils' disposal. The differences between these two perspectives are made clear in Tables 4A and 4B, which show the per pupil expenditure in primary education in the OECD countries in 2010 according to the percentage of per pupil expenditure versus per capita GDP (Table 4A), and according to the per pupil expenditure in terms of purchasing power (Table 4B; for the sake of brevity, the table shows only OECD countries in which the data are more or less similar to Israel).

18 16 Taub Center for Social Policy Studies in Israel Table 4A, in which the classification is according to the per pupil expenditure relative to the standard of living (per capita GDP), shows that in Finland, Canada and Israel the expenditure relative to per capita GDP is similar (about 22 percent of GDP), but the value of the educational services received by the pupil in terms of purchasing power differs. In contrast, Table 4B points to an opposite situation: the level of resources allocated to education in countries is similar even when the order of priorities differs in Slovakia, which allocates 25 percent of per capita GDP to each pupil in primary education, and in Poland, which allocates 30 percent of per capita GDP to the area, the per pupil resource allocations are quite similar to the level in Israel, which devotes only 22 percent of per capita GDP. Table 4A. Per pupil expenditure on primary education in selected countries, 2010 by magnitude of per pupil expenditure on primary education as percent of per capita GDP Country Per pupil expenditure on primary education as percent of per capita GDP Per pupil expenditure on primary education in ppp dollars Finland 21% 7,624 Israel 22% 5,758 Canada 22% 8,933 Hungary 23% 4,684 Korea 23% 6,601 EU average 23% 7,155 New Zealand 23% 6,842 Spain 23% 7,291 OECD average 23% 7,974 Australia 23% 9,463 EU average 23% 7,974 Australia 23% 9,463 Portugal 23% 5,922 Belgium 23% 8,852 Source: Nachum Blass and Yulia Cogan, Taub Center Data: OECD (2013)

19 The Ministry of Education Budget: Table 4B. Per pupil expenditure on primary education in selected countries, 2010 by magnitude of per pupil expenditure on primary education Country Per pupil expenditure on primary education, in ppp dollars Per pupil expenditure on primary education as percent of per capita GDP Czech Republic 4, Hungary 4, Estonia 5, Slovakia 5, Israel 5, Portugal 5, Poland 5, Korea 6, France 6, New Zealand 6, EU average 7, Spain 7, Finland 7, Netherlands 7, OECD average 7, Source: Nachum Blass and Yulia Cogan, Taub Center Data: OECD (2013) Figure 4 shows the discrepancy between the per pupil expenditure relative to per capita GDP in Israel and the corresponding average rate in the OECD countries (including Israel). The figure clearly indicates that the OECD countries give greater importance to education at every age level. It is also evident that the gap between Israel and the OECD in the area of expenditure on early childhood education and secondary education has grown in the course of the period under study, and in the area of primary education, the trend has reversed from being positive to being negative.

20 18 Taub Center for Social Policy Studies in Israel Figure 4 Difference between Israel and the OECD in per pupil expenditure, as percent of per capita GDP by education level, 2000, 2009 and Preschool (from age 3) - - Primary schools -6% -5% Secondary schools Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance A similar conclusion may be drawn from examining the resources actually available to the education systems. As Figure 5 clearly indicates, the per pupil expenditure at all age levels in the OECD was much higher than in Israel, and the gap is growing continuously The trend, however, has shifted for the better since 2010, but it is hard to assume that the gaps have closed.

21 The Ministry of Education Budget: Figure 5 Difference between Israel and the OECD in per pupil expenditure, by education level, Index: Israel = 100 Israel = 100% Preschool Primary school Secondary school Source: Nachum Blass and Yulia Cogan, Taub Center Data: OECD Nonetheless, since 2008 with the initial implementation of the "New Horizon" pay agreement with the teachers in primary education there has been a significant, perhaps even dramatic, shift in the trend of investment in the education system. The rate of per pupil expenditure in Israel has risen rapidly, whereas the per pupil expenditure in the OECD has stagnated and even declined slightly, despite the decline in the number of pupils (OECD, 2013). In light of the fact that the effect of the "Oz Le-Tmura" pay agreement with the teachers in secondary education will be seen in the data for , along with the completion of the implementation of the Compulsory Education Law for Ages 3-4, it would appear that the trend of improvement in Israel is likely to continue in the coming years and may even intensify. Figure 6 shows the rate of change in per pupil expenditure, stemming from the change in the overall expenditure on education on one hand and from the change in the number of pupils on the other hand. Between the years 1995 and 2010, the rate of change in per pupil expenditure in the OECD was higher than in Israel, but the rate of change in the overall expenditure on education in Israel was higher than in the OECD. The

22 20 Taub Center for Social Policy Studies in Israel reason for this is that the number of pupils in the OECD did not change, and even declined slightly at the end of the period, whereas in Israel the number of pupils grew by 60 percent. Figure 6 Difference in per pupil expenditure, number of pupils and education expenditure* between Israel and the OECD, Index: 1995=100 Israel OECD average Education expenditure Number of pupils Per pupil education expenditure * Does not include higher education Source: Nachum Blass and Yulia Cogan, Taub Center Data: OECD In the past 15 years, then, the Ministry of Education has grown both in overall terms and in terms of per pupil. On the face of it, this indicates an improvement in the education system's situation, at least with regard to the state resources it receives. But did the Ministry of Education fully utilize the at its disposal? Here the answer is more complex. The implemented during the period under study (and also prior to it) amounted on average to some 102 percent of the original, and to about 96 percent of the amended (see Table 2 previously). This would seem a very impressive level of implementation, especially relative to the original. In monetary terms, however, this means that in 2012, for example, the Ministry of Education failed to use NIS 1.34 billion of its (see the difference between the

23 The Ministry of Education Budget: implemented and the amended in Table 2, and the full sums in each type of in Appendix Table 1). 12 Comparing gross and net s shows that, the differences between the numbers in the different s change only slightly, and on average over the years they are almost identical (Figure 7). The discrepancies between the planning and the implementation are more prominent in 2012, which was the second year of the biannual. The reason for that may be real developments in the educational field (e.g., completion of the "New Horizon" reform, initial implementation of the "Oz Le- Tmura" pay agreement, and the Trajtenberg Committee's recommendations), but the reason might also be the planning difficulties inherent in a biannual. Figure 7 Original, amended and implemented gross and net, 2000, 2005 and 2012 Amended relative to, net Amended relative to, gross Implemented relative to, net Implemented relative to, gross Implemented relative to amended, net Implemented relative to amended, gross Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance 12 See the discussion that follows on the issue of examining the implemented.

24 22 Taub Center for Social Policy Studies in Israel At the end of the day, the data point to the growth of the Ministry of Education, or in other words, the popular belief that the education has suffered constant cutbacks since the start of the period under study has no basis in reality. This in itself is a positive thing for the education system. The question is whether it also is reflected in the field, i.e., whether schools had more per class and per pupil teaching hours at their disposal, more teaching aids and improved learning conditions. These questions deserve further consideration, but that will not be done in this paper (the chapter "Trends in the Development of the Education System," in the Taub Center's annual State of the Nation Report 2014, deals extensively with this topic). 2. Changes in the Ministry of Education Budget at the Designated Area Level To this point, the overall development of the Ministry of Education has been surveyed. This chapter discusses internal changes in the ministry's at the area level, as reflected in the different area allocations. Afterwards, plans that show prominent gaps between planning and implementation will be examined. Upon examination of the data shown in Figure 8 (and in greater detail in Appendix Table 2), a striking change emerges in the relative weight ascribed to the different subjects handled by the Ministry of Education. The areas with the largest increases (in percentage terms) are primary education, preprimary education, special education, and the area of school transportation costs, development and equipment (this change stems mainly from the transfer of the special education transportation item from the special education program to the transportation program). As a result and not surprisingly, all the other areas' shares of the have shrunk. The most prominent declines were in the area of the teachers' administration and the general pedagogical administration. The question examined in this part is whether the drop in these areas' relative share stemmed from a real decline in the size of the allocated to them, or only from the fact that there was such an appreciable rise in the primary education.

25 The Ministry of Education Budget: Figure 8 Original, 2005 and 2014 by area, as percent of Ministry of Education Staff units Teacher s administration +, Pedagogic administration Preprimary education Primary education Secondary education Settlement education Independent recognized education,, + + +, Transportation, equipment, development Religious institutions, + Special education + Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance Looking at the entire time period of the study to some extent obscures the changes in preprimary education and in transfers to the religious institutions. These two areas have seen changes following the social protest which led to the accelerated implementation of the Free Compulsory Education Law for Ages 3-4 and due to the change in the composition of the government coalition. The data in Figure 9 show that until 2012, the area of preprimary education kept its relative share of the Ministry of Education's original (on the order of about 8 percent), and then jumped to almost 12 percent in 2013 and stayed at that level the following year (of course, the implementation level remains to be seen). In contrast, supports to religious institutions have slumped since 2012 (in this case, too, the implementation level needs to be examined).

26 24 Taub Center for Social Policy Studies in Israel Figure 9 Transfers to religious institutions and preschool education as percent of original, Preschool education 14.0% 12.0% Transfers to religious institutions Transfers to religious institutions 3.5% 3.0% 10.0% 2.5% 8.0% 6.0% Preschool education 2.0% 1.5% 4.0% 1.0% 2.0% 0.5% 0.0% % Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance As happens at the level of the overall, there are large discrepancies between the amended and the original at the area level, too, where the phenomenon is quite pronounced, and at the plan level, where it is even more pronounced. As was seen in Table 3, the only area in which the amended was on average less than the original during the years was administration and staff units. The difference between the amended and the original in other areas (preprimary, primary, secondary, and localities) was relatively small, but in the areas of administration, teachers' administration and general pedagogical administration, Haredi education and transportation and equipment, the difference between the amended and the original ranged from 16 to 27 percent. The largest difference 37 percent was in the area of transfers to religious institutions. Those areas which are consistently ed far beyond their original share two characteristics. The first is their relative small ary scale. The second is that on the whole they concern ary transfers in

27 The Ministry of Education Budget: shekel terms, i.e., the transfer of money directly to schools or other agents, and not the transfer of the right to employ a certain number of teachers. Another characteristic common to some of these areas is their apparent dependence on coalition agreements. What is the significance of this consistent disparity between the amended and the original in certain areas? First, the difference indicates mainly that the Ministry of Education with the consent of the Ministry of Finance and the Knesset's Finance Committee systematically uses the reserve item (which is included in the area of general staff programs) to increase certain area s. Therefore, the original does not faithfully express the available resources of the various areas. It appears that the Knesset, the Ministry of Finance and the management of the Ministry of Education knowingly mislead the public regarding the resources available to each area, and for reasons of their own are not interested in providing accurate information. It is hard to find an acceptable explanation for this ing method, except for the organizational and political freedom that it affords those at the head of the education system. This freedom of action comes at the expense of transparency and planning efficiency, though. A second conclusion that is suggested and supported by the data is that the public is entirely unable to use the data in order to examine the government's policy or its planning capacity. The data presented previously point to one of two possibilities (or perhaps both of them). One possibility is that the Ministry of Education's planning ability is questionable, otherwise there is no explanation for the large discrepancies between the original and the amended. The second possibility is that the Ministry of Education and Ministry of Finance do their planning according to the amended, i.e., they anticipate the changes in the, and mislead everyone who takes the debate over the original seriously. 3. Changes in the Budgets of Selected Areas This section surveys the main changes at the level of plans and clauses in the Ministry of Education's main areas of activity in the years (and in the case of the original, 2014). At the outset, a very important note is in order. In many of the plans and clauses examined in this chapter, there are significant

28 26 Taub Center for Social Policy Studies in Israel differences between the original allocation, their amended and the implemented. In some cases, the disparities stem from changes in definitions, from the merging and separation of various clauses, or from different ways of presenting the same clauses. It was sometimes possible to identify these changes, sometimes not, and in any event the need to try to track changes that are not explained anywhere makes it more difficult to follow the ary planning and its implementation. The aim of this paper is not to explain the reasons for these differences - almost certainly those concerned have their explanations, more or less convincing; the aim is merely to point to the data as it is presented in the book. At any rate, even if there is a satisfactory explanation for every change in the, those reasons should be given to the public in a clear and intelligible way, and even if they are good reasons (in the opinion of those responsible for the ) there is still room for questioning and criticism of the disparities between the planning and implementation. Administration and General Staff Units The administration and general staff units' area includes mainly the ary reserve items and a few other units, such as the accountant's and spokesperson's unit. In this item, there is a notably large difference between the original, the amended and implemented. In the years , the size of the original was about NIS 1.3 billion. The size of the amended was on average about NIS 346 million, whereas the implemented amounted on average to only NIS 260 million (Table 5). The reason for these large disparities is that this area includes the three primary reserves: the general reserve, the reserve for cost increases, and the reserve for salary cost increases. In the course of the year, these reserves are transferred almost in their entirety to the general reserve item of the Ministry of Finance, and from there to various items in the Ministry of Education or to other needs of the Ministry of Finance (as will be explained further on). Various clauses amounting to about half a billion shekels from the original are then added to the reserve revisions, but disappeared or were drastically reduced in the amended and especially in the implemented - which points to the fact that they, too, were in effect "hidden reserves."

29 The Ministry of Education Budget: Starting in 2012, there was a real increase in the staff units' area, which was also accompanied by an increase in the amended and implemented. The bulk of the increase was in various reserve items, so it was possible in 2012 to transfer NIS 1.1 billion from the reserves to other items, whereas in 2011 only NIS 800 million were transferred. This means that increasing the reserve items serves to reinforce the lack of transparency in the (and as shown in Table 1 previously, the hidden reserve also grew considerably). Table 5. Staff unit area, by type, NIS thousands, 2011 prices Year Original Amended Implemented Percent increase in original Percent increase in amended Percent increase in implemented ,261, , , ,255, , , % -41.8% -45.2% ,332, , , % 36.1% 21.5% , , , % -5.3% 4.4% ,359, , , % 4.6% -3.8% ,440, , , % 14.2% 13.6% ,258, , , % 23.5% 29.4% ,694, , , % 27.8% 41.8% ,856, % ,800, % - - Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance Within the general staff units' area, there is an especially interesting clauses for RAMA, the National Authority for Measurement and Evaluation. While the original in the years from the time of its establishment in 2005 until 2012 amounted to NIS 305 million, and the amended amounted to NIS 354 million, the implemented

30 28 Taub Center for Social Policy Studies in Israel was only NIS 200 million. 13 RAMA, which was established on the recommendation of the Dovrat Committee, is one of the Ministry of Education's leading programs, and it is largely responsible for an area which the ministry considers of the highest importance: evaluating pupil achievements and teacher performance. It is impossible to explain this under-utilization already in the initial organizational stages, and it is important to examine the reasons for this under-utilization on the one hand, and for the constant increase in the amended as opposed to the original, on the other hand. Administration The administration area includes the administrative expenses of the Ministry of Education. It is noteworthy that despite the increase in the ministry's during the period , there was no real growth in the allocation to the area, and there is even a measure of reduction in the ministry's administrative (Table 6) In the years , relatively small sums were ed for RAMA's staff operations in the framework of another ary item, "staff operations," which was included in the area of pedagogical administration and there, too, the utilization was negligible. Pointing that out does not constitute criticism or an assertion that the real placed at the disposal of RAMA was not fully utilized. It merely should be clarified that the that was presumably available for RAMA was not utilized (or alternatively, not all of RAMA's expenditures were expressed in the ), and that requires an explanation. 14 This is an important point in light of the recurring contentions, ungrounded in the authors' view, regarding the high costs (some even call it "waste") in the Ministry of Education although it is, of course, possible that activities which were included in this area at the beginning of the period were transferred to another area in the course of this time period.

31 The Ministry of Education Budget: Table 6. Administration area, by type of, NIS thousands, 2011 prices Year Original Amended Implemented Percent increase in original Percent increase in amended Percent increase in implemented , , , , , , % -1.9% -0.7% , , , % -1.1% 0.3% , , , % -1.0% -3.6% , , , % 8.0% 5.9% , , , % 3.4% 4.0% , , , % -6.3% -6.2% , , , % 2.6% 3.4% , % , % - - Source: Nachum Blass and Yulia Cogan, Taub Center In this item there are two noteworthy clauses: Motivational pay clause. In the past three years, the original allocated to this clause has been almost completely identical to the amended and implemented. This goes to show that accurate planning is possible. Pupils' insurance clause. The amended allocated to this clause is about 50 percent above the original. The reason for this is unclear, since both the number of pupils and the cost of insurance should be known in advance.

32 30 Taub Center for Social Policy Studies in Israel Teacher Administration In the framework of the teacher administration area, ing is provided for teacher training institutions and for some of the employment conditions that are not a direct component of pay, such as training funds and housing support for teachers who move to development areas. The size of the original changed very little from 2005 to 2012, but it was slashed by 30 percent for (Table 7). In light of the fact that during that period there were changes in teachers' pay, it can be said that in real terms the shrank even earlier. The size of the amended and implemented both of which were higher than the original throughout the period did not change essentially between 2005 and On a multi-year average, the amended is larger than the original by about 21 percent. The implemented deviated from the original by about 16 percent, but it amounts to only 96 percent of the amended (Table 3 above). Nonetheless, the ary years raise two questions that remain unanswered. First, in 2012, the amended and implemented were larger than in 2011 by about NIS 600 million, and the reason for this dramatic increase (and the consequent widening of the gap between the amended and implemented and original ) remains unclear. Second, it remains unclear what the reason is for the no less dramatic slashing of the original between 2012 and 2013 the original in 2013 is about half a billion shekels lower than in In light of the great importance that the international professional literature ascribes to the topic of teacher training, the question arises: Is this a statement, explicit or implicit, being about the importance the Ministry of Education attributes to teacher training generally, or to their training in the institutions under its supervision in particular?

33 The Ministry of Education Budget: Table 7. Teacher administration area, by type of, NIS thousands, 2011 prices Year Original Amended Implemented Percent increase in original Percent increase in amended Percent increase in implemented ,836,678 1,958,118 1,881, ,876,856 2,147,584 2,033, % 9.7% 8.1% ,837,453 2,201,719 2,154, % 2.5% 5.9% ,873,119 2,209,586 2,150, % 0.4% -0.2% ,838,003 2,267,672 2,185, % 2.6% 1.6% ,842,708 2,185,612 2,074, % -3.6% -5.1% ,863,749 2,177,260 2,048, % -0.4% -1.3% ,828,101 2,723,080 2,616, % 25.1% 27.8% ,305, % ,314, % - - Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance Within the entire area, a few clauses are particularly striking in the differences between the original allocations and the amended and implemented s, or in their fluctuations over time: A. Teachers' pay in the teachers' training institutions ( ). From 2005 to 2012, the average amount of this clause was less than half a billion shekels in the original, but the amended and implemented s were on average 30 percent higher. It is hard to think of a justification for such large disparity from the when the staff numbers and other factors are fixed and known in advance. In another clause of teachers' pay in the teachers' training institutions ( ), the average amount from was

34 32 Taub Center for Social Policy Studies in Israel about NIS 130 million. In 2012, the amended and implemented were 68 percent larger than the original again, for no apparent reason. Altogether, in the two clauses of teachers' pay in the teachers' training institutions, the implemented was 50 percent higher than the original. B. Budget clause for in service training of teaching workers ( ). In the years under study, this clause was ed at about NIS 35 million, but the implemented came to about NIS 64 million and the amended even reached about NIS 105 million (three times the original sum). In contrast, another clause concerning the in service training fund for teachers ( ) showed a particularly strange pattern. The deviations from the original range from 0 percent in the years 2005, 2010 and 2011, to 26 percent in 2008, 47 percent in 2009, 56 percent in 2012 (on the order of about NIS 350 million). Especially prominent is the drastic cutback in the years : from an implemented of NIS 960 million in 2012 to planning on the order of NIS 46 million. Apparently the reason for this is the transfer of the in service training fund s to another clause in the which cannot be identified (almost certainly one of the pay clauses). In the original, the clause for in service training grants to teachers ( ) consistently grew: from NIS 25 million in 2005 to about NIS 115 million in The corresponding sums in the amended were NIS 22 million and NIS 133 million, respectively. General Pedagogical Administration The general pedagogical administration area usually includes overall national plans that are difficult to fit into a specific educational stage. The area has seemingly undergone a process of reduction: the original in 2009 was almost 20 percent lower than in 2005, and only in the years did it return to its original size (Table 8). In the years , the for the area increased slightly, but the actual implemented remains to be seen. However, the reduction process reflected in the original can hardly be found in the amended (except for the years ). On average, the amended was higher than the original by 30 percent, while the

35 The Ministry of Education Budget: implemented was on average higher than the original by only 9 percent and lower than the amended by 16 percent. In 2012, the amended and implemented grew by 4.7 and 9.5 percent, respectively. Table 8. General pedagogical administration area by type of, NIS thousands, 2011 prices Year Original Amended Implemented Percent increase in original Percent increase in amended Percent increase in implemented ,196,009 1,343,168 1,144, ,174,331 1,359,767 1,164, % 1.2% 1.8% ,149,387 1,426,831 1,271, % 4.9% 9.2% ,006,585 1,322,528 1,116, % -7.3% -12.2% ,287 1,310,782 1,108, % -0.9% -0.7% ,778 1,452,452 1,225, % 10.8% 10.5% ,194,465 1,598,807 1,252, % 10.1% 2.2% ,169,321 1,673,454 1,370, % 4.7% 9.5% ,252, % ,290, % - - Source: Nachum Blass and Yulia Cogan, Taub Center Data: Ministry of Finance Within the general pedagogical administration area, the share of the clauses that are ed in shekel terms, i.e., not earmarked directly for teachers' pay, is high relative to other areas, which allows for a greater degree of ary freedom. In many of the clauses, there is a significant discrepancy between the original and the amended and implemented s the latter are bigger than the original. Were these clauses under-ed from the beginning? And did the actual ing meet the real needs? To answer these

36 34 Taub Center for Social Policy Studies in Israel questions, the amended must be compared to the original and the implemented at the level of the clauses. Budget Clauses in Which the Amended Budget Is Higher than the Original Budget There are many clauses in the pedagogical administration area in which the amended is consistently and significantly higher than the original in the period under study. Among the prominent clauses in this regard are the educational welfare program, the Center for Learning Programs, the Atidim project, and activities of the youth administration. In each of these clauses, the original is smaller than the amended, on a multi-year average, by at least 30 percent. 15 It goes without saying, then, that the Ministry of Education must have been aware that the original does not meet the demands for implementing the activities of this clause. Budget Clauses in Which the Amended Budget Is Higher than the Implemented Budget Despite the considerable interest from a planning perspective in the differences between the amended and original s and those between the implemented and original s, the really interesting differences are those between the implemented and amended s. These disparities express both the ministry's executive ability and its actual order of priorities. Upon examination of the clauses in which the amended is higher than the implemented by more than 20 percent, an interesting picture emerges: Five-year plan for the advancement of Arab Israeli education. This plan was supposed to lead to a narrowing of the achievement gaps between the Jewish and Arab Israeli sectors. Although the amended was larger than the original, the implemented was even smaller than the original, amounting to only 82 percent of 15 Other prominent clauses in which the amended was much higher than the original include cultural activities in neighborhoods, the Yad Vashem Remembrance Authority, field trips administration operations, Adjustment Committee for Learning Disabilities, the dispersed Bedouin sector, volunteer teachers, community centers, cultural basket, and national service volunteers.